Blockchain As Explained By Edward Snowden

Edward Snowden and blockchain-two topics that have been covered like a blanket over the past few years now appear together in one article. It is an unlikely pairing of two entities apparently going in different directions. In a far-ranging interview with his lawyer (trying his best to keep his client viable), lawyer Ben Wizner coaxes Snowden to open up on the technology to help us better understand the ins and the outs of blockchain.

Block Chain explained by Edward Snowden

There is a bit of irony here. Blockchain is in its nascence and ascending in people’s consciousness and in corporate practice. Snowden, on the other hand, struggles to remain relevant-something which grows more difficult as each month passes with him in exile. But since it has been a while since Edward Snowden had a platform, and since the prospects for blockchain technology have continued to grow, his explanation to his lawyer, and us, of what exactly blockchain is—from his perspective- warrants our attention.

Here’s this article sheds some meaningful light on the exciting possibilities of blockchain going forward.

It’s A Trust Issue

At its core, Snowden maintains that blockchains are an effort to create a history that can’t be manipulated. This is opposed to other well- known databases where any entry can be changed just by typing over it. With blockchain, however, ES asks us to:

“Now imagine that entry holds your bank balance. If somebody can just arbitrarily change your balance to zero, that kind of sucks, right? Unless you’ve got student loans. The point is that any time a system lets somebody change the history with a keystroke, you have no choice but to trust a huge number of people to be both perfectly good and competent, and humanity doesn’t have a great track record of that.”

Like Links In A Chain

So, according to Snowden, with blockchain transactions can’t be changed- it is “verifiable accounting”- akin to a high-tech public notary.  Hence, you can trust it and Trust is a constant theme in Snowden’s discourse. And each “block” or link in the chain –a “glorified database” dependent on the previous link or block in the chain. And since each block relies on the block before it, in essence, it all goes back to the first block in the chain. Bingo, you’ve got blockchain.

“Each new block created, which in the case of Bitcoin happens every ten minutes, effectively testifies about the precise contents of all the ones that came before it, making older blocks harder and harder to change without breaking the chain completely.”

The Value Of Blockchain

You’ve probably read about the myriad ways that blockchain is going to change our lives for the better. Goodness knows, in this space in the past I’ve written extensively on the subject. Everything from immigration to medical records to voting security and more will be improved with blockchain. Yet, somehow, every conversation about blockchain and its many characteristics and advantages reverts to money. Money makes the world go ‘round-so the song goes- but it certainly gets and holds everyone’s attention.  So what makes blockchain so potentially viable and valuable in the world of money? In Snowden’s parlance, it all goes back to the “trust” word.

To him, money today is:

“ ….A little cotton paper at best, right? But most of the time, it’s just that entry in a database. Some bank says you’ve got three hundred rupees today, and you really hope they say the same or better tomorrow. Now think about access to that reliable bank balance — that magical number floating in the database — as something that can’t be taken for granted, but is instead transient. You’re one of the world’s unbanked people. Maybe you don’t meet the requirements to have an account. Maybe banks are unreliable where you live, or, as happened in Cyprus not too long ago, they decided to seize people’s savings to bail themselves out. Or maybe the money itself is unsound, as in Venezuela or Zimbabwe, and your balance from yesterday that could’ve bought a house isn’t worth a cup of coffee today. Monetary systems fail.”

Blockchain and Cryptocurrencies

It stands to reason that, at this point, the focus shifts to non- paper money—in other words, cryptocurrencies. They like any other medium of exchange have their flaws—most notably the finite number of coins available in a world that has an infinite and growing appetite for cash money. And, the uncrowned champion of the cryptocurrency ring is, of course, Bitcoin-the other money. What is Edward Snowden’s take on Bitcoin?

“I like Bitcoin transactions in that they are impartial. They can’t really be stopped or reversed, without the explicit, voluntary participation by the people involved. Let’s say Bank of America doesn’t want to process a payment for someone like me. In the old financial system, they’ve got an enormous amount of clout, as do their peers, and can make that happen. If a teenager in Venezuela wants to get paid in a hard currency for a web development gig they did for someone in Paris, something prohibited by local currency controls, cryptocurrencies can make it possible. Bitcoin may not yet really be private money, but it is the first “free” money.”

Obstacles to Success

In his view, the only thing that would stop cryptocurrencies march to prominence is laws-the technology being inalterable. But don’t sneeze at the propensity of government to impose laws or regulations lest crypto owners avoid taxes or clandestinely fund terrorist organizations. So for large-volume, large-scale transactions by prospective evaders, they will have to at some point change their cryptocurrency to cash and will sound the appropriate alarms.

To be sure, Bitcoin and other cryptocurrencies face other things than just regulatory ones. The same type of people who might champion the clandestine currency might also rail against the enormous blight caused by the energy demands to create the currency on the environment. And data centers to house the computers could swallow up whole towns. So, it is unlikely now and for the foreseeable future that currencies like Bitcoin will become the province of bent oligarchs and moguls to the detriment of mankind.

Thus, the technology driving all this is blockchain and, in Edward Snowden’s mind at least, it holds the solution for much of what is wrong with the proliferation of tech, social media, and the internet.

Back To The Trust Issue

Mistrust, due to “fake news”, interference in elections, cyber-bullying and such abounds. Back we go to that word. Trust.  To wit he opines about trusting blockchain:

“…they’re boring, inefficient, and wasteful, but, if well designed, they’re practically impossible to tamper with. And in a world full of shifty bullshit, being able to prove something is true is a radical development. Maybe it’s the value of your bank account, maybe it’s the provenance of your pair of Nikes, or maybe it’s your for-real-this-time permanent record in the principal’s office, but records are going to transform into chains we can’t easily break, even if they’re open for anyone in the world to look at.

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